Producers in Western Canada drilled some 3,000 coalbed-methane (CBM) wells in 2005, estimate FirstEnergy Capital Corp. analysts in a recent report. That is nearly twice the number of CBM wells the industry drilled in 2004. And, the 2005 rate was considerably dampened by some rainy weather in southern Alberta last summer, the Calgary-based investment firm notes. Wet ground nearly shut down operations for several months. This year's activity should be even more robust. Producers including Apache Corp., MGV Energy, Trident Exploration and EOG Resources are expected to substantially increase their drilling budgets for CBM, and service capacity has mushroomed. Rigs should be plentiful for shallow drilling, and fracturing equipment should be widely available, the analysts expect. Given that the weather cooperates, FirstEnergy forecasts a dramatic 40% jump to 4,200 CBM wells in 2006. The pace of growth should moderate the following year, as companies move fully into development-drilling programs. An additional 300 wells per year are expected for 2007 and each of the years going forward. The average Horseshoe Canyon CBM well costs C$370,200, including land acquisition, and the average Mannville well runs about C$1.25 million. At present, about 85% of Canada's CBM wells target Horseshoe Canyon coals, but in the future the more expensive Mannville wells will account for an increasing share of the activity, the analysts forecast. FirstEnergy estimates that producers spent C$1.38 billion on Canadian CBM drilling in 2005, and will spend C$2.03 billion in 2006. "CBM development will be profitable for both production and service companies," the analysts report. By 2010, investment in the sector should reach C$3.4 billion, before inflation.